Months of negotiations at the Executive Mansion between representatives of business and labor failed to produce agreement on how to change Illinois' workers' compensation or unemployment insurance systems. The workers' compensation changes were put off for a year and a half. Unemployment insurance talks snagged over the question of benefits for workers locked out of a plant, but those negotiations will probably be revived before the current agreement runs out December 31.

The workers' compensation system has been beset by backlogs. There is some agreement that Illinois needs to spend more money for the Illinois Industrial Commission, the group that runs the system that is behind in processing claims. Gov. James R. Thompson pledged more money if he had the resources; he had none since his proposals to raise taxes failed.

Complicating resolution was the imbalance of the two sides: Business is more dissatisfied with the worker's comp system than labor. "There was just no give on either side," says Jeff Miller, Thompson's chief of staff. Rejected was a proposal to stimulate movement by setting a "sunset" for the act. The parties agreed to a moratorium on new legislation until a review of the system is completed in January 1989. One of the problems, Miller says, is deciding what states Illinois should be compared with. Costs may be high relative to neighboring Indiana, but are in line with states like New York, Michigan and California.

Unemployment insurance would seem to be a simpler matter to resolve. The current system was installed in 1983 after hikes in benefits and reductions in taxes bankrupted the system and forced borrowing from the federal government. That money will be repaid by the end of the year, leaving the state able to reduce taxes that business pays and to increase benefits to workers.

The roadblock was definition of lockout. Labor claims that Illinois differs from other states in denying unemployment benefits during a lockout. When a national union strikes plants in several states, only those in Illinois go without the benefits, they say. Business wants to keep the system. Miller says there are incentives that will facilitate a settlement this year: If no agreement is reached, the system automatically reverts to its pre-1983 provisions with their lower taxes and higher benefits compared to current provisions. That means certain and swift insolvency, Miller maintains.

The impasse over workers' compensation and unemployment insurance spilled over into the tax increase debate late in the session. Resolution of both was a precondition set for tax increase support by Sen. James "Pate" Philip (R-23, Wood Dale). Gov. Thompson said the condition was impossible. 

Michael D. Klemens

August & September 1987/Illinois Issues/57